Anthony Natale, 44, of Neshanic Station, and Kenneth Lagonia, 58, who now lives in North Carolina, pleaded guilty to conspiracy to commit wire fraud in U.S. District Court in Newark.

They are among 10 suspects who have acknowledged bilking mortgage lenders and investors through a company called NJ Affordable Homes, according to assistant U.S. attorneys Robert Kirsch and Justin W. Arnold.

The firm, based in Middlesex County, offered investors high annual interest rates by renovating and reselling homes, many of them in Newark and Irvington.

But instead of buying and fixing up homes, authorities say the firm's owner, Wayne Puff, used much of the money from new investors to repay older ones while pocketing millions for himself and his accomplices.

The alleged scheme began to crumble in 2005, when the Securities and Exchange Commission filed an emergency enforcement complaint. Puff is currently in federal custody.

Natale, whose law office was in Cranford, was hired by Puff to conduct the property closings for NJ Affordable Homes and admitted directing his paralegal to falsify loan applications. He declined to comment.

Lagonia was president of a subsidiary of NJ Affordable Homes called Quality Homes Are Us. He admitted writing letters to investors, in which he falsely claimed the company was profitable.

Lagonia also admitted using a company credit card to pay for a relative's funeral and family trips to Disney World.

"He acknowledged his guilt, and he feels terrible about what happened," said Alan Zegas, Lagonia's lawyer.

Natale and Lagonia were released on $100,000 bond. They face up to five years in prison and $250,000 in fines under federal guidelines. U.S. District Court Judge Jose Linares scheduled sentencing for May 18.